Expense Reimbursement Fraud: How Finance Can Detect and Prevent It
Mekari Insight
- Common schemes include mischaracterized, overstated, fictitious, and duplicate reimbursement claims.
- Finance can look for duplicate transactions, receipt mismatches, unusual claim frequency, and unclear business purposes.
- ACFE found that 84% of occupational fraud perpetrators showed at least one behavioral red flag before detection. The finding covers occupational fraud broadly, rather than reimbursement fraud specifically.
- Clear policy, approval, document checks, and transaction review give finance more control over reimbursement claims, while Mekari Expense brings these controls into the same expense workflow.
An employee submits a $180 dinner reimbursement with a receipt attached. The amount falls within the company’s limit. A few weeks later, finance finds the same merchant, date, and amount in another claim.
A duplicate claim can hide inside a normal reimbursement queue. Other cases look different. An employee may inflate a real expense, submit a personal purchase as a business cost, or claim an expense that never happened.
Expense reimbursement fraud happens when an employee intentionally submits a false, inflated, duplicated, or otherwise invalid claim to receive money from the company. The claim should match the actual expense, its business purpose, and the supporting evidence.
Common Expense Reimbursement Fraud Schemes and Examples
Most reimbursement schemes fall into a few recognizable patterns. Some involve a completely fabricated expense. Others start with a legitimate purchase and change the information before the employee submits the claim.
| Fraud scheme | Example | What finance can check |
|---|---|---|
| Mischaracterized expense | A personal meal is submitted as a client dinner. | Merchant, date, location, and business purpose |
| Overstated expense | A $120 expense is submitted as $180. | Claimed amount versus receipt |
| Fictitious expense | An employee claims a taxi ride that never happened. | Supporting transaction and related activity |
| Duplicate reimbursement | The same hotel expense is submitted twice. | Merchant, date, amount, and receipt history |
| Retained refund | A canceled flight is refunded but remains in the reimbursement claim. | Travel record, cancellation, and refund |
The same fraud can leave different signals in the transaction data. A duplicate claim creates a matching pattern, while an overstated expense requires finance to compare the submitted amount with the original receipt.
Read more: Travel Expense Fraud
Red Flags Finance Can Look for in Reimbursement Claims
A single transaction rarely tells the whole story. Finance gets a clearer picture by comparing the claim with the receipt, policy limit, previous submissions, or the employee’s broader expense reporting history.
A $95 claim may fit a $100 limit and match the receipt. Repeated claims at similar amounts from the same merchant give finance another reason to review the account.
ACFE’s 2026 research found that 84% of occupational fraud perpetrators showed at least one behavioral red flag before their fraud was detected. The study covers occupational fraud in general, so the figure does not represent a reimbursement-fraud rate. It does show why repeated signals deserve attention during financial review.
| Red flag | What finance should compare |
|---|---|
| Duplicate amount, date, or merchant | Current claim against previous submissions |
| Claims repeatedly near the policy limit | Current amounts against the employee’s history |
| Claim amount differs from the receipt | Claimed amount against source documentation |
| Date or location does not match business activity | Claim against travel, meeting, or work records |
| Business purpose is unclear | Merchant and transaction against the stated purpose |
| Unusual claim frequency | Recent submissions against the employee’s normal pattern |
| Receipt looks altered or incomplete | Submitted document against the original transaction |
Several signals appearing together matter more than a single unusual claim. A repeated near-limit pattern, for example, becomes more relevant when the employee also submits vague business descriptions or inconsistent supporting documents.
Finance can then compare the claim with the evidence, the policy, and the employee’s previous submissions. Each comparison answers a different question and gives the reviewer more context before approving or rejecting the claim.
How Can Companies Prevent Expense Reimbursement Fraud?
A clear reimbursement policy gives finance a starting point. It can define eligible expenses, spending limits, required documents, and approval thresholds. Higher-value or higher-risk claims can move through multiple approval levels before payment.
Internal controls also affect how much room a fraudulent claim has to pass through. ACFE’s 2024 study found that lack of internal controls contributed to 32% of occupational fraud cases, while override of existing controls contributed to 19%. Together, the two factors appeared in more than half of the cases studied.
Finance can build review checks into the reimbursement process itself. Duplicate claims, receipt mismatches, policy exceptions, and unusual spending patterns can then surface during review instead of after the payment has been settled.
Some claims will still need attention after payment. Finance may need to document the issue, recover the amount where appropriate, and review the control that allowed the claim through.
| Control stage | What the company can do |
|---|---|
| Prevent | Set reimbursement rules, limits, document requirements, and approval paths |
| Detect | Compare claims with receipts, check duplicates, review exceptions, and monitor spending patterns |
| Correct | Reject invalid claims, recover improper payments, document findings, and review the failed control |
The process works best when each check happens close to the point where the claim is submitted, reviewed, and approved.
How Mekari Expense Helps Prevent Expense Reimbursement Fraud
Reviewing a reimbursement becomes harder when the claim, receipt, policy, and approval trail sit in different places. Mekari Expense keeps these steps within the same reimbursement workflow, giving finance one record to review before payment.
Finance can set custom policy rules for reimbursement limits and requirements based on the company’s rules. Approval creates another checkpoint before the claim moves forward.
The reimbursement record can hold the claim details and supporting documents together. Finance can review the amount, category, evidence, and approval history without piecing the transaction together from emails and spreadsheets.
Travel-related claims can carry context from the business activity behind the expense. Cash advances add another reconciliation point when finance needs to check how employees used and accounted for the amount provided.
Read More: Cash Advance Settlement Guide
For teams processing a high volume of claims, the reimbursement workflow keeps submission, review, approval, and payment within the same process.
Conclusion
A reimbursement claim should be traceable from the amount submitted to the receipt, the business purpose, and the approval behind it.
That trail gives finance a clearer way to review suspicious claims while routine reimbursements keep moving through the process.
References
- Association of Certified Fraud Examiners (ACFE). Occupational Fraud 2026: A Report to the Nations. (2026)
- Association of Certified Fraud Examiners (ACFE). Occupational Fraud 2024: A Report to the Nations. (2024)
- Case IQ. Expense Reimbursement Fraud: How to Protect Your Company. (2025)
- Bonadio. Expense Reimbursement Fraud: Common Schemes and How to Prevent Them. (2025)
